Of course, the stock declines are more complicated than just games (e.g Meituan share distribution), but there is shrinking games revenue and strict internet regulations. Tencent and NetEase, two of the biggest games companies in the world, saw some of the most significant stock price decreases. Importantly, regulation isn’t isolated to the West. What does this mean for early-stage studios just starting up and can larger companies pioneer new business models that are accretive to the consumer? Given all the consolidation of the past two years (and a few blockbuster ones earlier this year: Zynga, Bungie, Activision), the regulatory eye might continue to wear down. In short, with the FTC eyeing both this new business model (subscription) and the burgeoning VR space (e.g the Within acquisition), there is growing hesitancy that studios / publishers might not find the same, competitive exit outcomes. We wrote a round up a few weeks back about the topic since, SuperJoost and Stratechery have also provided additional nuanced perspectives on the topic that are important reads. Regulation: With the FTC suing Microsoft for the company’s proposed acquisition of Activision, regulation has been a front and center topic for the games industry. This piece is more of a holistic look at some of the ripple effects some of the companies faced this past year (and might still encounter moving forward). Given broader public market movements, it’s not surprising gaming will see a decline in growth this year.Īs the big public companies have been reforecasting (shameless plug, check out Naavik Pro’s newly launched Financial Markets segment, it’s worth taking some space to reflect on this past year, and specifically the challenges more mature gaming companies faced / how it has impacted the games industry. According to Newzoo, the global games market is forecasted to generate $184.4B (-4.3% YoY) in 2022. At a high level, though, most (if not all) gaming stocks are YTD down - in general, public markets have been decimated. his was one of the fastest growing market segments in the world these past two years, with booming interest particularly at the early-stage. This was especially true for the gaming industry particularly when compared to the two consecutive record-breaking years of 20. 2022 turned out to be a very challenging year for the global economy.
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